LONDON: European stock markets sank in opening deals Thursday following the first Omicron coronavirus case in the United States.

Sentiment was also hampered by expectations the US Federal Reserve will start hiking interest rates next year to combat high inflation.

In initial trade, London's benchmark FTSE 100 index dropped 0.8 percent to 7,112.37 points, compared with the closing level on Wednesday.

In the eurozone, Frankfurt's DAX shed 1.2 percent to 15,281.50 points and the Paris CAC 40 lost 1.2 percent to 6,801.52.

Asian markets wavered amid ongoing Covid turmoil, after Wall Street suffered a late plunge as Omicron arrived stateside.

"Further developments on the Omicron variant and the interest rate outlook are putting a dampener on sentiment, as investors grapple with the economic impact of both," said Richard Hunter, head of markets at Interactive Investor.

News that a patient had come down with the new variant sent shivers through US investors who fear authorities will be forced to reintroduce strict containment measures or even lockdowns, derailing the recovery in the world's top economy.

That comes on top of a widespread belief the Fed will end its vast bond-buying financial support programme quicker than expected and begin hiking interest rates next year to prevent inflation -- now at a three-decade high -- from running out of control.